GBPNZD trying to break out as elections loom

Pound crosses have pushed further higher this week as investors continue to price in the prospects of a Tory majority win in the upcoming UK election, which could pave the way for the Brexit deal to be finally passed through parliament in early 2020.

Voting will begin on Thursday and the outcome of the election is expected in the early hours of Friday.

With elections remaining in focus, FX traders have again ignored weaker-than-expected UK data that was released this morning.

While other pound crosses have already made their moves, such as the GBP/JPY, GBP/CAD, EUR/GBP, and GBP/AUD, the GBP/NZD has so far lagged as both GBP and NZD pushed higher.

Today, however, the NZD has been on the back foot, allowing the GBP/NZD cross to push higher and peak above the trend line of the falling wedge pattern.

Source: Trading View and FOREX.com.

Note that the GBP/NZD has also reclaimed the key support at 2.00 after briefly breaking below it. This psychological level was formerly resistance as you can see here and here.

So, the path of least resistance continues to be to the upside. A confirmed breakout from this bullish continuation pattern could see rates start to make a move towards – and possibly beyond – the 2.0560 high created earlier in the year.

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